Glycol Is Not Pessimistic, Short-Term Trend Is Strong.

Recent glycols seem to be less pessimistic. Fundamentally speaking, port inventory continued to decline yesterday (Monday), and the operating rate remained stable. The main port delivery was good at the weekend and the price of ethylene glycol was good in the short term.

Recent risk factors lie in the uncertainty of downstream production and marketing, but the increase in downstream operating rates will form a certain support for ethylene glycol prices in the short term. Ethylene glycol is expected to maintain a strong short-term oscillation.

Cost side overall stabilization

The recent crude oil market is bad and positive. On the one hand, the global economic slowdown makes the market worried about the demand for crude oil, and trade tensions still affect the market atmosphere.

OPEC monthly report shows that in July, OPEC crude oil production decreased by 246 thousand barrels to 29 million 610 thousand barrels per day. OPEC will reduce global crude oil demand growth in 2019 by 40 thousand barrels per day to 1 million 100 thousand barrels / day, and pointed out that in 2020, fear of re entering the supply surplus situation; on the other hand, the Saudi oil field was attacked by husai armed UAVs, and OPEC will further reduce production expected to rise to support the oil market. In the short term, crude oil will show a wide concussion.

Port departure is expected to bring benefits.

The total inventory of ethylene glycol in East China totaled 923 thousand and 800 tons last week, a decrease of 17 thousand and 700 tons compared with August 8th. The cost of going to the warehouse was not much lower than expected, mainly due to the fact that the import of cargo from ports last week was less affected by typhoon weather.

This week, the port of East China is expected to arrive at 121 thousand tons of port.

Demand side is seasonally rising channel.

Demand side, last week polyester operating rate continued to rise slightly, to 88.9% near; installations, near the middle of August, two sets of new polyester devices were opened and put together, totaling 380 thousand tons, in addition, the pre reduction pet device resumed and the recovery increased, polyester load gradually picked up;

In terms of production and marketing, polyester production and marketing increased further and last week, and polyester inventories dropped to a very low level in history. Pet profits in the week were at a relatively high level, with higher local profits and the rest also had good profits. On the other hand, the rebound in downstream weaving and the demand for terminal orders were also improved.

To sum up, the volume of pre port arrivals is relatively low this week, and the domestic operating rate remains low, and the supply side maintains a tight situation. From the demand side, the polyester link is experiencing a seasonal recovery channel, and the construction starts to rise to near 89%. In the short term, ethylene glycol market volatility is mainly strong, followed by polyester production and marketing and terminal market situation. (source: Guo Ye net, Huatai futures)